Computer chips are vital to the digital economy and are increasingly central to global competition, especially between the U.S. and China. Under President Biden, the U.S. has imposed restrictions to limit China’s semiconductor ambitions, a trend likely to continue under President Trump. Chips enable data processing and are crucial for technologies like generative AI, with their demand skyrocketing across various industries.
While the U.S. leads in semiconductor technology, Taiwan and South Korea dominate manufacturing. China, eager to boost its own chip production, faces U.S. export controls and tariffs that hinder its progress. Despite these restrictions, Chinese companies, such as Huawei, are attempting to develop independent manufacturing capabilities.
The global chip industry has become highly concentrated, with only a few companies like TSMC, Samsung, and Intel at the forefront. Other countries, including those in the EU, Japan, and India, are investing heavily to enhance their semiconductor sectors and reduce reliance on foreign supply chains.
A major risk to global chip production is the potential for conflict over Taiwan, which could disrupt the supply chain, given that TSMC is a key player in chip manufacturing.
